Rupee recovers 9 paise from all-time low to close at 88.06 against US dollar

Mumbai: The rupee recovered 9 paise from its all-time low level to settle at 88.06 (provisional) against US dollar on Wednesday, on positive domestic equities, softening of crude oil prices and weak US dollar index.

Forex traders said the rupee is trading near all-time low levels amid persistent foreign fund outflows on the back of ongoing trade tariff concerns between India and the US.

At the interbank foreign exchange market, the rupee opened at 88.15 against the US dollar, then fell to an intraday low of 88.19 and a high of 87.98 against the American currency.

The domestic unit finally settled for the day at 88.06 (provisional), higher by 9 paise over its previous closing.

On Tuesday, the rupee declined 5 paise to close at an all-time low of 88.15 against the US dollar.

"The Indian rupee strengthened against the US dollar today on positive domestic equities and softening of crude oil prices at higher levels. Weak US dollar index too favoured the rupee," Anuj Choudhary, Research Analyst Currency and commodities Mirae Asset ShareKhan, said.

Choudhary further noted that the rupee is expected to trade with a slight negative bias amid persistent FII outflows on the back of ongoing trade tariff concerns between India and the US.

"However, overall weakness in the US dollar and positive tone in the domestic markets may support the rupee at lower levels. Traders may take cues from JOLTS job openings and factory orders data from the US. Investors may remain cautious ahead of non-farm payrolls report from the US this week," he said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.20 per cent to 98.19.

Brent crude, the global oil benchmark, was trading 1.66 per cent lower to USD 67.99 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 409.83 points to settle at 80,567.71, while Nifty surged 135.45 points to 24,715.05.

Foreign institutional investors offloaded equities worth Rs 1,159.48 crore on Tuesday, according to exchange data.

On the domestic macroeconomic front, the Indian services sector growth touched a 15-year high in August, driven by a sharp rise in new orders and output, amid substantial improvement in demand conditions, a monthly survey said on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index was up from 60.5 in July to 62.9 in August, indicating the steepest rate of expansion since June 2010.

Meanwhile, President Donald Trump has said the US gets along with India "very well" but the relationship was "one-sided" for many years since New Delhi was charging Washington "tremendous tariffs".

Trump's comments come amid a strain in ties between New Delhi and Washington after the US imposed 50 per cent tariffs on India, among the highest in the world.

He said for many years, the relationship between India and the US was "one-sided" and that changed when he assumed office.